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In first budget, Mayor Hodges proposes tax levy increase for Minneapolis

The mayor also proposed more money to address racial equity, along with investments in public safety.

Mayor Hodges: “We must catch up with inflation if we wish to keep up with our basic services, already cut to the bone.”
MinnPost photo by Karen Boros

In her 2015 budget address on Thursday, Minneapolis Mayor Betsy Hodges proposed a 2.4 percent increase in the city’s tax levy, a move that comes after three years when the rate stayed flat or — in the case of 2014 — actually went down. 

“Decreasing the levy last year and holding it at a zero or below inflation for the two years before that helped out residents. It was a good thing to do,” said Hodges during her introduction of the budget.

Hodges explained the need for the increase by outlining the aggressive plan to invest in infrastructure that began in 2008, which created debts that must be paid off beginning in 2015. The budget for next year must also factor in inflation, which has not been part of the process in recent years.

“We must catch up with inflation if we wish to keep up with our basic services, already cut to the bone,” said Hodges. “To do that requires increasing the amount of money that we raise in property taxes.”

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The Mayor estimated that, even with the levy increase, half of residential property owners in Minneapolis would see not increase in the city portion of their tax bill, which also includes taxes for Hennepin County and the Minneapolis Public Schools.

“I think the levy is pretty reasonable,” said Council Member Cam Gordon after Hodges spoke. Gordon noted that with the tax base growing, as it is in Minneapolis, that the city has an opportunity to add revenue. “The only way we can actually see the benefit of the tax base growing is to increase the levy.”

“It was not totally unexpected, but I would rather it was closer to 2 percent,” said Council Member Elizabeth Glidden. “The budget address is our first taste of the budget and folks like me are waiting for the details.”

Most of the budget address focused on a department-by-department list of how some money would be spent. The address did not include any comments about programs or staff that might be cut. And it did not include a total for the one-year budget beginning next January.

“I strongly support Chief Janee Harteau’s strategy of getting officers out of squad [cars] and talking directly with our residents and business owners,” said Hodges, who would increase the number of sworn officers by 10 for a total of 860.

The budget includes $960,000 for a class of 18 new police cadets in 2015 and another $1 million to add 40 new Community Service Officers, double the number that are in the current budget.

The CSO’s are typically recruited from Minneapolis high schools to work in community outreach for the Police Department. The CSO program pays a salary, college tuition and provides an opportunity for participants to become sworn officers upon graduation.

“Our Community Service Officers are significantly people of color,” said Hodges. “Laddering them into becoming sworn officers over time will accelerate efforts to make sure that our force looks like the neighborhoods that they serve.” 

The budget for 2015 also includes $1.14 million for video cameras to be worn by police officers, a project that has been studied for the past year and will be launched later this fall as a pilot program. A year ago, the council approved $400,000 to begin the process of outfitting officers with cameras.

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The Minneapolis Fire Department will receive $800,000 for two new recruit classes next year. The budget for 2014 included $1.1 million to hire 30 new recruits.

Both the police and the fire department have large numbers of employees eligible to retire in the next 10 years.

The proposed budget also includes provisions to add workers in departments that serve the construction industry, which is having a very busy year. “Yesterday we learned that the city has exceeded $1 billion in permitted work,” said Hodges.  Last year the city did not reach the $1 billion level in building and construction permits until October. Hitting that level in 2014 marks the third year in a row at the $1 billion level. Minneapolis, we are in a building boom.”

The budget also includes $3.5 million for the city portion of the cost of rebuilding Nicollet Mall. Last spring the legislature approved $20 million for re-design of the Mall as part of the state’s bonding bill.

Hodges began her speech by reflecting back to her campaign for mayor a year ago when she ran on a platform of a well-run city, increased growth and equity. During that campaign, she talked about eliminating the gaps that separate white residents from those of color when it comes to opportunities in education, employment and housing. 

“Now we get to put our money where our votes were,” said Hodges at the start of her speech. “Budgets are a fine grained detailed way to show the community that we meant what we said.  Budgets are where our money meets our values.”

She started by adding two positions in the City Coordinators Office that will focus on equity in every department of the city.  She would also increase the fund for affordable housing by $1 million, add $70,000 for an education program for parents of teenagers, and an additional $55,000 for the Youth Coordinating Board which serves young people facing challenges in housing, education and social outcomes.

The budget also adds one worker to the elections and voter services staff to do outreach and education.

Work on the 2015 budget will begin August 27th, when the Board of Estimate and Taxation conducts a public hearing followed by a vote on the tax levy September 17.  The board is responsible for setting the maximum tax levy for the city.

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The City Council will also begin department-by-department hearings soon. In years past, only members of the Ways and Means Committee were allowed to vote on budget items during the hearing process. Those not serving on Ways and Means could not vote or amend the budget until the final meeting when the full council met for a final vote.

But this year the committee structure was changed to allow every council member to serve on the budget committee and make changes before the council gathers for a final vote.

“I think you may see more activity during the budget hearings,” said Council President Barb Johnson following the mayor’s budget presentation. Johnson added that she wanted more information about the budget than what was presented in the speech.  “I think we have to look a little closer and do a deeper dive to find out exactly what the overall revenue picture is.” 

Traditionally the budget process will end in mid-December with a public hearing on the proposal followed by a vote of the council  members.